Clusters

Overview

To inform the development of policies supporting the preservation of unsubsidized, lower-cost rental housing, the Institute for Housing Studies with faculty and students from DePaul University’s School of Computing developed a clustering analysis that identified rental housing market typologies for submarkets in the 50 largest metropolitan Statistical Areas (MSAs) in the US.

As described in previous IHS collaborations that use this technique, a clustering or market segmentation analysis examines a broad range of factors necessary to evaluate rental housing conditions and needs by building a data model that identifies geographic units with similar characteristics. Clustering algorithms incorporate multiple variables to group items by their overall similarity. When applied to community-level data, clustering provides a way to compare and group different geographic units that share similar traits, regardless of their physical proximity. This analysis primarily relies on ACS Public Use Microdata Sample (PUMS) data and examines factors tied to rental housing demand, rental housing supply, and rental housing affordability.

The clustering application identified six distinct rental housing market types:

Cluster 1

View a map of Cluster 1 here.

Very low-income renters, an older rental stock, and high levels of cost burden indicate affordability challenges tied to concentrated poverty and a history of disinvestment. Most frequently found in the urban core of "mature" metro areas with higher levels of segregation and histories of disinvestment.

Cluster 2

View a map of Cluster 2 here.

Prosperous urban core with older rental housing, but also recent new development. Loss of lower-income renters and increasing higher-income renters indicate displacement pressures and increasing exclusivity. Most frequently found in the urban core of economically dynamic and larger metro areas.

Cluster 3

View a map of Cluster 3 here.

Older rental housing stock and limited new construction, paired with increased demand from higher-income renters leads to challenging affordability conditions. Most frequently found in suburbs of more "mature" metro areas.

Cluster 4

View a map of Cluster 4 here.

Generally affordable rental markets that have seen new growth in rental housing development, but also rapidly deteriorating affordability conditions. Often found as part of the urban core of smaller, growing metros or suburban areas in larger, more established metros.

Cluster 5

View a map of Cluster 5 here.

High-income suburbs with limited rental options, particularly affordable rental options. Most frequently found in the suburbs of most metro areas.

Cluster 6

View a map of Cluster 6 here.

Low density suburbs with limited rental options, but generally affordable. Typically found in the suburban fringe of most metro areas.

Technical Documentation

A detailed description of the data used and cluster methodology can be found here.